Chapter 4: The Role of Company Networks in Low-tech Industries
David Jacobson and Francesco Garibaldo 1. INTRODUCTION The empirical evidence in this chapter is based on research carried out for PILOT, a European Commission financed project on policy and innovation in low- and medium-tech industries (LMT).1 We employ it to examine the interactions among such factors as globalization, embeddedness and innovation in the development of small firms. Each of the research teams in the PILOT consortium provided information on up to four small and medium enterprises (SMEs) that had been relatively successful in LMT sectors. For the purposes of this chapter, we were able to use the information on 34 of the cases; missing information in the other ten cases meant they had to be omitted. The information was provided on the basis of one of the network-relevant issues addressed in the project – local embeddedness.2 The chapter begins with an examination of the theoretical and empirical aspects of the evolution of local interfirm networks in order to set the scene for the variety of structures and trajectories in these industrial systems. Globalization, through its impact on local networks, has challenged both localized industrial districts themselves and the theoretical attempts to make sense of the industrial dynamics in their evolution. In the next section, the work of Storper (1997, 2000, 2005) is shown to provide a means of focusing on the dynamic of the interaction between local and global development. This framework is then applied to the PILOT data and, in the conclusion, the results and suggestions for further work...
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